Settlement update: A non-option option for appeals

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Friday, December 8, 2017

WASHINGTON – CMS has rolled out a new settlement option for low-volume appeals, but it’s not likely HME providers will take the agency up on its offer, stakeholders say.

Providerswith fewer than 500 appeals pending at the Office of Medicare Hearings and Appeals and the Medicare Appeals Council combined as of Nov. 3, 2017 with a total billed amount of $9,000 or less per appeal could be eligible, if certain other conditions are met.

The kicker: CMS will settle eligible appeals at 62% of the net allowed amount.

“It’s a tricky situation,” said Andrea Stark, a reimbursement consultant with MiraVista in Columbia, S.C. “We need the cash now, in light of reimbursement cuts, so we might be tempted to take 62%, but if we really do expect most claims to be reversed favorably, we get 100%. That’s the give and take.”

Ross Burris, an Atlanta-based healthcare attorney with Polsinelli, put it this way: “You have a better shot of getting everything during an ALJ hearing—if you can wait, and that wait is now almost three years.”

The low-volume appeals settlement follows similar offers to acute care and critical care access hospitals to resolve pending appeals in exchange for timely partial payment of 68% of net payable amount.

Another drawback of settling, says Wayne van Halem, president of Atlanta-based The van Halem Group: Claims remain denied in the system, meaning any subsequent claims for related supplies, for example, also remain denied.

“It’s not a discussion about medical necessity—it’s just a discussion about money,” he said. “So it may behoove us to stay in the process, because then it will apply to subsequent claims.”

But what about that wait?

“They are using it as a bargaining chip,” van Halem said. “They’re saying, you only have 10 claims assigned to an ALJ, and 790 are sitting there and will be for a long time. That’s frustrating. The settlements that I’ve been involved in have not been great experiences.”

Stark also feels like the settlement offers are not in good faith, particularly when CMS has said, in its litigation with the American Hospital Association, that it can’t clear the backlog at the ALJ by 2021 as ordered, because it needs to look at each claim and verify medical necessity.

“I don’t know if it’s a really great way to avoid accountability,” she said, “and none of it fixes the underlying problem of trying to figure out how not to get claims to the ALJ in the first place.”